Well, if the choice is between the Euro and gold, I say gold, hands down!! If the choice is between the U.S. dollar and gold, I still say gold. However, there is a growing chorus singing the praises of dirty old coal, as a solid, short term (6-12 month) investment for your retirefund, possibly, even better than gold.
What would these two events do to the economic outlook of North America, and the world, for the next 50 years? Are these events even possible? Are they likely? Are they "pie in the sky" theories?
In a recent article ( see World changing technology ) we discussed a new, technological breakthrough, by a small California Company, Carbon Sciences, which may allow large emitters of CO2 to not only capture it, but turn the CO2 into gasoline.
As if that announcement wasn't eye opening enough, they claim that they can do this with no measurable pollution result. Researchers also state that the process will work just as well with oil sands and shale deposits. As if that isn't enough to get investors attention, they advise that, although it can be refined in traditional refineries, this synthetic oil is best refined in micro refineries which can be built for 25% of the cost of today's refineries. The United States Government has already approved construction of one such micro refinery to test the UTA Lab's breakthrough technology.
The coal being used is one of the cheapest, Lignite, which is found in abundance in Texas and around North America. Texas lignite coal sells for $18 per tonne. The coal conversion technology uses one tonne of coal to produce 1.5 barrels of crude oil. One barrel of crude produces 42 U.S. gallons of gasoline. In other words, $18 worth of coal yields 63 gallons of gasoline: 0.28 cents per gallon! In other words, if this technology proves out, both the USA and Canada (as well as many other democracies around the world which have abundant supplies of coal, will own centuries worth of cheap energy, and become net exporters of that energy!
Without having first hand knowledge, I will wager here, that the oil industry has a big stake in this technology and who better to develop such innovation than the deep pocketed U.S. oil companies. It is in their financial interests to keep the good ole US of A hooked on it's product(s). As both China and India grow their middle class, energy production needs to use every resource.
As Natural Gas companies ramp up production from traditional finds as well as giant shale deposits which exist all over North America, the price of that resource continues to drop. North America has the largest deposits of Natural gas in the world today, and that resource alone could power North America for hundreds of years.!
So how do we, as investors, digest this new information and how can we make it work for our portfolio's?
In the short term, until new technologies are accepted and come on stream, the price of oil will creep up as this shaky recovery takes shape. However, as these technologies get proven and are adopted large scale, the price of oil could sink dramatically (still several years out). If oil can be produced from a cheap, abundant supply of coal, on shore in North America, without damaging the environment, then the whole dynamic changes. I'm not an economist, however here are some possibilities that come to mind:
1. Coal mining would intensify throughout North America, creating blue collar jobs in small communities currently devastated by the economic down turn, with the resultant economic spin offs to equipment suppliers and construction companies, to those mining companies.
2. A new boom in refinery construction would also create hard hat, engineering and tech jobs, as well as create the same sort of spin offs to suppliers.
2. Oil sands production will halt, because you cannot dig bitumen for processing at $25 per barrel. (Even though the UTA process works on bitumen as well as coal)
3. Investments in OPEC oil resources would be severely tested as demand from it's largest customer, the USA, begins to drop dramatically.
4. As more power plants can be built using cheap oil and Natural gas (as well as nuclear and wind energy), the demand for Electric Vehicles (EVs) will grow, along with the demand for Lithium which will be used to store energy.( A contrarian argument can be made here for the growth of Hybrid vehicles instead of electric, because of cheaper gasoline.
5. Shipping oil via tankers may drop significantly.
6. Railways will be winners as coal and natty gas are shipped throughout North America and more petroleum based products are again made on this continent and shipped trans continent. (Warren Buffet you old investor you!)
7. The usd will continue to slide, until these events begin to unfold, at which time it will strengthen once again.
8. Industry will return, at least in some form, to North American communities powered by cheap energy.
9. Huge, energy market speculators, like JP Morgan, will no longer be able to hold the American consumer hostage by holding tankers full of oil offshore and spiking the price so they can sell into the inflated market.
10. New Fuel Cell Stack, Power plants powered by plentiful natural gas will be built, reducing co2 emissions, and helping to "electrify" the transportation industry along with Wind Energy.
These are only some of the possible outcomes, and I am sure that more learned readers than I can come up with a myriad of possibilities. No matter how you slice it, if these technologies take hold, along with the Fuel Cell industry, the Lithium boom , Wind energy and Solar, and the advent of the Electric car, the economic outlook for this continent will brighten once again, as we lead the world in production and possibilities.
"Carbon Sciences is the furthest along in the CO2 to fuel business"USA Today
Editors note:Carbon Sciences Inc (CABN-OTC) is developing a new breed of "Nano-Reactor" that should revolutionize the nascent carbon capture and conversion industry allowing for the commercialization of converting carbon emissions (from coal and oil fired industries and from natural gas ie: from landfills) directly into usable gasoline, "without" using high energy heat.
The company has already demonstrated it's technology works, and expects to have a working reactor by the end of Q3 2010. The sector is now referred to as Gas to Liquids or "GTL" and it is growing. The company's president, Byron Elton, was recently interviewed by Ally Velchie on CNN Business and that interview can be found at: http://www.carbonsciences.com/01/youtubeplayer.html
Article:
Until now, Carbon capture, and storage has been the high fruit for a number of new companies rushing to get even a small piece of the growing, multibillion dollar industry of cleaning up our coal, oil and natural gaspower plants, as well as the millions of businesses who dump carbon into the atmosphere every day. But what if you could not only capture that carbon, but turn it into a usable product with an immediate market?
A small California company, Carbon Sciences Inc. has announced a truly ground breaking technology that, not only utilizes the carbon being released from these entities, but actually turns it into usable fuel, much like mother nature does over a million years, but doing it a lot quicker. Actually, within hours of the carbon capture. Basically, they say they can convert dirty air and dirty water, into an immediately usable fuel such as methanol, gasoline, jet fuel or diesel, doing what mother nature does, only a million times faster.
Needless to say, I was very intrigued by the market potential of such a process. Multi-Billion dollar markets in renewable energy and carbon reduction, heretofore two separate markets, could bring this small company immense wealth in the coming years, if the technology allows commercial application on a large scale, so I dug a little further.
Carbon Sciences recently announced it had invented a nano-scale reactor that functions like a highly efficient artificial microorganism that contains a proprietary enzyme process and serves a single purpose – to absorb CO2 molecules and excrete fuel molecules.
This nano reactor, called Smart Particle, is the key to achieving a fast reaction time and industrial scale up of the company’s CO2-to-Fuel process. The patent application for Smart Particle Technology contains the detailed design of Smart Particles as well as a proprietary manufacturing process where they self-assemble in solution without any external nano-manufacturing.
What I found most interesting is that, other companies racing to perfect similar processes, are utilizing immense heat to produce the same result. Up until now, high heat was necessary to do this. What Carbon Sciences appears to have is a ground breaking process that completely eliminates the need for generating high heat to complete the process and thereby eliminating the need for energy to produce energy. It is truly a novel idea with huge potential around the world. Carbon Sciences will be targeting the markets in the USA and China in it's initial push for a share of this market.
Click on this graphic for an enlarged (readable) version.
For a video, explaining the process, the Bio-Catalytic conversion and the Nano Reactor, click on: video
The CEO of Carbon Sciences Inc., Byron Elton, explains his company's focus, and the new process in this interview.
Applying Carbon Sciences' patent-pending technology in a laboratory scale prototype last year, the company successfully transformed a stream of CO2 gas into methanol fuel. The demonstration prototype uses Carbon Sciences’ innovative bio-catalytic process to break down CO2 and water, then combines the carbon and hydrogen to form methanol, a low level liquid fuel. The resulting methanol is directly usable as a fuel, or it can be used to build higher-level fuels such as gasoline, butanol and jet fuel. In January the company announced that is now able to produce gasoline directly from their process.
After successfully completing technology design and simulations, Carbon Sciences submitted a patent application, “A Bio-catalytic Process and System to Transform Carbon Dioxide into Methanol” to the U.S. Patent and Trademark Office on February 17, 2009.
According to Beacon Equity Research [.pdf], Carbon Sciences is developing a breakthrough technology for transforming harmful carbon dioxide emissions into the basic fuel building blocks required to produce gasoline, diesel fuel, jet fuel and other portable fuels. Carbon Sciences program plan is to use CO2 as a feedstock for producing portable fuels and simultaneously address the world’s energy and environmental challenges. The firm’s technology takes CO2 from coal-fired power plants and other large CO2 emitters and transforms it into portable fuels.
From the companies officers:
We always wanted to produce high-level fuels, such as gasoline, but knew that additional steps would be required to reach this goal. Now, we have the way to go directly to gasoline.
The United Nations’ IPCC estimates that the cost of simply capturing CO2 for applications, such as underground sequestration or transformation into products, can range from $45 to $73 per ton of CO2. This cost is perhaps the single biggest economic barrier to any large-scale CO2 applications, such as carbon sequestration. However, by being able to use a raw CO2 flue gas stream in our CO2-to-Fuel technology, we are no longer dependent on the success or commercial availability of carbon capture systems. In addition, unlike bio fuels based on growing plants to absorb CO2 from the air, our CO2-to-Fuel process is an industrial process that can produce fuel in minutes to hours, not months to years, to meet the demands of the world.
—Byron Elton, CEO of Carbon Sciences
We are very excited about these new processes. Our end-to-end CO2 to fuel system will have several modules. We have determined that one of these modules can function as a standalone system for use by a sizable part of the energy industry for the production of gasoline. Inquiries from potential strategic partners have further validated our decision to focus on this module. We are anticipating a shorter than normal development cycle for this module and are hoping to achieve commercialization in less than one year.
—Dr. Naveed Aslam, Chief Technology Officer
Carbon Sciences hopes to develop a commercially-attractive package by the third quarter of 2010 and are exploring a "strategic partnership" to take the process--and the company--to the next phase. They have also applied for DOE technology funding under the category of "Innovative Concepts for Beneficial Uses of CO2".
Disclosure: I bought some Carbon Sciences Stock on Friday, as it spiked while the markets were in full fear mode. I thought I'd get in before the rush. Sure, it's a penny stock, but so was RIMM at one time. If it only goes to .50 our profit will be 500% in a very short time frame.
Image by Jenn and Tony Bot via FlickrThis Christmas, should you put more gold in your Christmas stocking, or will a lump of coal actually increase your retirefund.
cent article ( see World changing technology ) we discussed a new, technological breakthrough, by a small California Company, Carbon Sciences, which may allow large emitters of CO2 to not only capture it, but turn the CO2 into gasoline.
Without having first hand knowledge, I will wager here, that the oil industry has a big stake in this technology and who better to develop such innovation than the deep pocketed U.S. oil companies. It is in their financial interests to keep the good ole US of A hooked on it's product(s). As both China and India grow their middle class, energy production needs to use every resource.![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uSuUhubk6LT6isvAR9n3V49CEV7gBGOj111GlD7pfyEVgiojSIqC0y0W__sGi1_DUgoP2VAdgpk9m1C2xw9FTljHmhpyMrIroB8lum-8WuYN7Nc_Q3bMfbuB2xe5kOc15PtKHK_1GmVyDqlXT9A8ya=s0-d)
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ure does over a million years, but doing it a lot quicker. Actually, within hours of the carbon capture. Basically, they say they can convert dirty air and dirty water, into an immediately usable fuel such as methanol, gasoline, jet fuel or diesel, doing what mother nature does, only a million times faster.
video, explaining the process, the Bio-Catalytic conversion and the Nano Reactor, click on: videoFuel technology, we are no longer dependent on the success or commercial availability of carbon capture systems. In addition, unlike bio fuels based on growing plants to absorb CO2 from the air, our CO2-to-Fuel process is an industrial process that can produce fuel in minutes to hours, not months to years, to meet the demands of the world.
s. We have determined that one of these modules can function as a standalone system for use by a sizable part of the energy industry for the production of gasoline. Inquiries from potential strategic partners have further validated our decision to focus on this module. We are anticipating a shorter than normal development cycle for this module and are hoping to achieve commercialization in less than one year.
